Correlation Between Kabelindo Murni and Indal Aluminium
Can any of the company-specific risk be diversified away by investing in both Kabelindo Murni and Indal Aluminium at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kabelindo Murni and Indal Aluminium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kabelindo Murni Tbk and Indal Aluminium Industry, you can compare the effects of market volatilities on Kabelindo Murni and Indal Aluminium and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kabelindo Murni with a short position of Indal Aluminium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kabelindo Murni and Indal Aluminium.
Diversification Opportunities for Kabelindo Murni and Indal Aluminium
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kabelindo and Indal is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kabelindo Murni Tbk and Indal Aluminium Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indal Aluminium Industry and Kabelindo Murni is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kabelindo Murni Tbk are associated (or correlated) with Indal Aluminium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indal Aluminium Industry has no effect on the direction of Kabelindo Murni i.e., Kabelindo Murni and Indal Aluminium go up and down completely randomly.
Pair Corralation between Kabelindo Murni and Indal Aluminium
Assuming the 90 days trading horizon Kabelindo Murni Tbk is expected to generate 0.66 times more return on investment than Indal Aluminium. However, Kabelindo Murni Tbk is 1.51 times less risky than Indal Aluminium. It trades about -0.05 of its potential returns per unit of risk. Indal Aluminium Industry is currently generating about -0.07 per unit of risk. If you would invest 31,200 in Kabelindo Murni Tbk on August 30, 2024 and sell it today you would lose (600.00) from holding Kabelindo Murni Tbk or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kabelindo Murni Tbk vs. Indal Aluminium Industry
Performance |
| Timeline |
| Kabelindo Murni Tbk |
| Indal Aluminium Industry |
Kabelindo Murni and Indal Aluminium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kabelindo Murni and Indal Aluminium
The main advantage of trading using opposite Kabelindo Murni and Indal Aluminium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kabelindo Murni position performs unexpectedly, Indal Aluminium can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Indal Aluminium will offset losses from the drop in Indal Aluminium's long position.| Kabelindo Murni vs. Kmi Wire And | Kabelindo Murni vs. Jembo Cable | Kabelindo Murni vs. Sumi Indo Kabel | Kabelindo Murni vs. Voksel Electric Tbk |
| Indal Aluminium vs. Intanwijaya Internasional Tbk | Indal Aluminium vs. Alumindo Light Metal | Indal Aluminium vs. Champion Pacific Indonesia | Indal Aluminium vs. Betonjaya Manunggal Tbk |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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